Bonds Continue Pushing The Record Pace, But MBS Are Lagging

Yesterday we asked what would come next for bonds after breaking through resistance levels (.58 in 10yr yields and 103.00 in 2.0 UMBS), what comes next.  Such breakouts can be the cue for a corrective bounce or a quick rush of additional momentum.  It looks like we're getting the latter, although it's more apparent in Treasuries.   MBS are lagging due to increased supply, but prices nonetheless hit new all-time highs.

Econ Data / Events
Market Movement Recap
08:17 AM

Bonds stronger overnight, largely during European session.  Weaker stocks helped.  10yr starting out just under the .54% technical level.  MBS are opening more than an eighth of a point higher.

11:31 AM

Bonds are off their best levels of the morning.  At first, this was a bond-specific move, but stock strength since 10:30am is also correlated.  2.0 UMBS are now up just over an eighth of a point (versus a quarter point earlier) and 10yr yields are up to .5249 from lows of .5134.

02:55 PM

Not much changed from the last update, but MBS continue dragging their feet near the lows of the day.  Treasuries, conversely, are near their best levels of the day.  Underperformance is largely due to increased supply pressure in MBS.